Numbers Show Depth of Deal

American Capital Strategies Ltd. has completed the buyout and recapitalization of its portfolio company, The New Piper Aircraft Inc., by purchasing $57 million of Piper's senior debt for $34 million and providing a revolving loan facility.

In addition, American Capital exchanged $22 million of the purchased senior debt for common equity in Piper. American Capital's original $20 million investment in subordinated debt is now a senior facility.

American Capital now owns 94% of Piper's voting equity

Affiliates of Exeter Capital Partners, a private equity firm and long time investor in Piper, made an additional common equity investment of approximately $1 million for 6% of the common equity as part of the recapitalization.

 "While Piper has reduced its new airplane production as a result of the downturn in general aviation after September 11th, we believe Piper is an excellent, well-run company," said American Capital COO Ira Wagner.

"With an iconic brand name in the general aviation industry and the most extensive product line, we are confident Piper will enjoy great success as the general aviation industry rebounds. Our investment in Piper is an example of our ability to step in as the equity sponsor of an existing portfolio company under the right circumstances."

Long-term relationship blossoms.

"This is an exciting opportunity for American Capital to continue our relationship with Piper," said American Capital Senior Vice President and Managing Director Gordon O'Brien. "We are working with a strong CEO, an industry veteran and innovator, who oversees a well established worldwide dealer network selling an unmatched product offering to a remarkably loyal customer base. Piper's installed base of 100,000 aircraft worldwide feeds its large proprietary parts business, and its underlying intellectual property is protected by numerous Federal Aviation Administration Type Certificates that govern manufacture of its planes. Its exemplary track record of new product releases and strong pipeline of new products also bode well for its future. Furthermore, we believe this transaction enhances the value of our original investment."

American Capital first invested in Piper, headquartered in Vero Beach (FL), in May 1998. Over 60 years in operation, Piper employs nearly 700. Piper notes it is "the only general aviation manufacturer to offer a complete line of aircraft for every general aviation mission, from trainers and high-performance aircraft for personal and business use to turbine-powered business aircraft."

Piper's next step: into a promising future.

"We look forward to growing Piper and introducing new products," said Piper CEO Chuck Suma. "American Capital's dedication, support and expertise bring to Piper the necessary resources to excel as we meet market demands with new products. Now that commercial travel is more time consuming than ever, flying a Piper makes more sense than ever."

American Capital bucked trend, made money for IPO investors.

As of June 30, 2003, American Capital shareholders have enjoyed a total return of 177% since the Company's IPO -- an annualized return of 19%, assuming reinvestment of dividends.

American Capital has paid a total of $11.68 per share in dividends since its August 1997 IPO at $15 per share. It now lists capital resources of approximately $1.8 billion.

FMI: www.newpiper.com; www.americancapital.com